AMP is WAC -- 03/27/26

Love is in the hair

I’m supposed to be getting ready to take a few days off but I’m having trouble detaching. I’m so in the zone (and happy with it all) that the idea of stopping seems scary? Which absolutely means that I need to take a break, right?... No issue next week unless something big happens.

Say Yes Under Duress. Late last week, CMS Deputy Administrator Chris Klomp told attendees at STAT News’ Breakthrough Summit that the administration has started consulting pharmaceutical companies on legislative language to codify its most-favored-nation (MFN) drug pricing deals into law.

It’s the first time an administration official has said publicly that the MFN strategy needs to move from executive action to statute; it’s a significant tell about the program’s underlying fragility.

Here’s why: the voluntary MFN agreements that 16 major manufacturers struck with the Trump administration came with a sweetener -- a three-year exemption from potential Section 232 pharmaceutical tariffs. That clock is running. When those tariff exemptions expire, manufacturers face a straightforward recalculation.

Without a statutory backstop, the White House loses its main piece of leverage, and the deals unravel. Klomp knows this. Reading companies into legislative language before going to Congress is the pre-work you do when you need industry not just to tolerate a bill but to actively support it. Which seems kind of cute to me. Like pat-a-kid-on-the-head cute. I mean, these deals were signed so that this is exactly what didn’t happen.

Ultimately, what makes this complicated is that codifying MFN doesn’t happen in a vacuum. The Inflation Reduction Act already created a Medicare drug price negotiation program covering dozens of the same drugs targeted by MFN. Both programs aim to bring U.S. prices closer to international benchmarks, but through completely different mechanisms; one through direct government negotiation of maximum fair prices, the other through voluntary deals tied to tariff relief.

That resolution mechanism doesn’t exist yet. The legislative consultation Klomp described is how it starts getting built or doesn’t. It seems unlikely to move in the short term but, long term, the idea is out there.

Cash Me if You Can. On March 20, the White House added three Boehringer Ingelheim drugs to TrumpRx, including two diabetes therapies priced around $55 (down from roughly $525) and a COPD inhaler at about $35 (down from $276). Boehringer becomes the ninth manufacturer on the platform.

The discounts are real. But the positioning is shifting. CMS Deputy Administrator Chris Klomp said TrumpRx was “never meant” for people with insurance. He framed it as a limited cash-pay tool, not a systemwide solution to drug pricing.

That’s a pretty meaningful reframing from where this started.

TrumpRx launched in January with the promise of delivering MFN-level prices to American patients. In practice, it works best for people paying cash. The discounts don’t stack with insurance and don’t count toward deductibles, which makes it largely irrelevant for insured patients navigating formularies, prior authorization, and cost-sharing accumulation.

The story underneath the story starts to come into focus. It’s a side channel. And it’s a side channel that happens to align with a growing population. Medicaid cuts tied to the reconciliation bill are expected to increase the number of uninsured individuals. So TrumpRx may expand not because it’s solving systemwide affordability, but because more patients are pushed into the segment it serves.

This creates an odd dynamic. A platform positioned as a pricing solution ends up functioning more like a backstop for coverage erosion. For manufacturers, this clarifies where TrumpRx sits. It’s not a replacement for formulary access or payer strategy. It’s a separate pathway with different economics, different patients, and limited interaction with the insured market. That means decisions about participation aren’t just about price. They’re about channel strategy, patient mix, and how much of the business is expected to flow outside traditional coverage altogether.

Different Wrapper, Still a Price Control. This week, the Rare Access Action Project published a paper making a pretty direct argument: importing MFN pricing into state policy sounds intuitive, but it doesn’t actually translate. Major disclaimer... I wrote this paper.

Here is the main thesis: MFN only works at the federal level because of leverage. Medicare can set terms because participation in the program is effectively non-negotiable for manufacturers. That leverage is what makes the price “stick.” It’s not just the reference to international benchmarks; it’s the enforcement mechanism behind it.

States don’t have that.

And that’s where a lot of the current policy conversation starts to drift. State proposals often treat MFN as a pricing methodology that can be lifted and applied anywhere. But without the same scale, statutory authority, and program integration that exists at the federal level, it doesn’t work.

The paper walks through how this shows up in practice. Upper payment limit (UPL) models or MFN-style caps at the state level risk setting prices without the ability to ensure supply, negotiate across a national footprint, or account for how manufacturers actually make portfolio decisions. That creates a real possibility of access tradeoffs, especially in smaller or more complex patient populations.

For manufacturers and patient groups, this is where the translation matters. MFN is not a plug-and-play pricing tool. It’s a federal construct that depends on leverage states simply don’t have. And when that gets lost, the policy conversation moves faster than the mechanics that determine whether patients get access.

Denied, Delayed, Delivered (Eventually) Last week IQVIA released new data showing that nearly half of Medicare Part D patients hit a denial when trying to start a branded drug.

In 2025, 47% of new-to-brand prescriptions in Part D were initially denied, up from 37% in 2021. Most patients eventually get through. About half of those denials are resolved within 30 days, and 60% of approvals happen the same day as the initial rejection. The average time to approval has held steady at around 11 days.

This isn’t about outright exclusion. It’s about friction. One in ten patients wait more than a month to start therapy. Fourteen percent of new-to-brand attempts never get approved within a year. At the patient level, nearly half of Medicare beneficiaries experienced at least one denial in 2024, and 30% of those patients never got approved for any attempt.

And yes, all of this happened for a reason. The $2,100 out-of-pocket cap, increased plan liability in catastrophic, and required coverage of negotiated drugs all compress margins. When margins compress, utilization management tightens. Prior authorization, step therapy, and administrative edits start doing more of the work.

That’s what this data is picking up. And it reframes how to think about the IRA’s coverage wins. Guaranteed formulary placement doesn’t remove access barriers. It relocates them.

For manufacturers, that shifts where the work is. Coverage strategy alone isn’t enough. The operational side of access, prior authorization support, speed to appeal, provider education, starts to matter just as much as formulary position heading into 2026.

Next. On March 19, Senate Finance Committee Democrats, led by Ron Wyden, put out a “Dear Colleague” letter outlining plans for a future health insurance reform agenda. This isn’t legislation. It’s positioning. But it’s pretty clear positioning.

The letter opens with a familiar story. Premiums rising faster than wages. Half of insured people insured are unhappy with their coverage. One-third delaying care because of cost. And, on the other side of the ledger, $71 billion in insurer profits and nine-figure CEO compensation.

The agenda has three pillars. Reverse recent coverage losses, simplify insurance design, and take on what they frame as corporate profiteering. That includes medical loss ratio practices, PBMs, and executive pay. There’s also a re-emphasis on standardizing plans and prior authorization, which is another way of saying less variation and fewer workarounds inside benefit design.

In context? This is a minority caucus mapping out what they would do if they had power again. And they’re being more explicit than they have been in a while.

The line to pay attention to is the reference to “Medicare-type choices for all Americans.” That’s not a throwaway. It keeps the public option concept alive, but in a way that leans on familiarity rather than wholesale system replacement. Pair that with the push to eliminate “junk plans,” and you start to see the contours of a more standardized, more regulated commercial market.

For manufacturers, this is less about what happens next year and more about where the pressure is building. Standardization sounds like simplification, but it also compresses design flexibility. Fewer benefit variations. More uniform utilization management. And potentially less room to differentiate access pathways across plans.

The takeaway isn’t that this passes anytime soon. It’s that the policy direction is getting clearer. And when the window opens, the proposals are already written.

When Reimbursement Risks Future Innovation: A Cell and Gene Love Story

Late last week, the USC Schaeffer Center put out a white paper on cell and gene therapy financing. The paper argues that the U.S. payment system is not built for one-time therapies with massive upfront costs and benefits that play out over years. True. But we have been circling this problem for a while now.

Think back to hepatitis C. When Sovaldi and Harvoni hit the market, the issue was never whether the drugs worked. They did. The issue was that curing a lot of people quickly costs a lot of money quickly. The system did what it tends to do under pressure. It slowed access down. Medicaid programs restricted coverage. Plans put up barriers. Everyone pretended this was a utilization management conversation when it was really a budget problem. Over time, the pressure eased. Some of that was additional competition, some of it was discounting, and some of it was simply that the initial wave of demand got worked through.

Then came the first gene therapy wave. Luxturna. Zolgensma. CAR-T. And with them came a burst of policy creativity. Outcomes-based contracts. Annuity payments. Reinsurance ideas. Stop-loss. Lots of smart people are trying to solve a real problem. But nothing really became the model. It all stayed kind of pilot-y. Interesting enough to get conference panels and white papers, not sturdy enough to become the way the market works.

That is not because the ideas were dumb. It is because they all run into the same wall. They require a level of coordination our system does not naturally provide. You need to track outcomes over time. You need to know who owns the financial risk if the patient changes plans. You need providers to be willing and able to carry inventory and administration costs. You need payers, manufacturers, and sometimes states all agreeing on what “success” looks like. That is a lot to ask from a system that struggles to share basic information cleanly and where patient churn is just part of the landscape.

We treated these therapies as exceptions. That worked, or at least sort of worked, because there were only a few of them and they were concentrated in very small patient populations. The system did not solve the financing problem, it contained it.

But now… the pipeline is getting bigger, and it is moving beyond the ultra-rare. CAR-T is being studied in autoimmune diseases. Gene therapies are being developed for broader populations. CMS itself has already had to step in with the Cell and Gene Therapy Access Model for sickle cell disease in Medicaid, which tells you the problem has moved beyond theory and into actual operational policy. Once the federal government starts building demonstration models around how to pay for something, that is usually a sign that the private market did not quite have this handled.

And this is where I think the conversation needs to go a step further. The risk here is not just that patients face delays or that plans put up guardrails or that providers worry about cash flow. All of that is true. But the bigger risk is what happens to innovation if we do not figure this out.

Because companies do not make investment decisions based only on whether the science works. They make them based on whether the science can become a viable product in the actual market we have. If you are looking at a one-time, high-cost therapy that may transform lives but enters a payment system that cannot reliably absorb it, that uncertainty matters. It may not kill investment on day one. But it starts to shape which programs get prioritized, which get delayed, and which never quite make it to the top of the list.

That is how innovation changes. Not usually through one dramatic announcement. More often through a series of quieter choices. A company decides the risk-adjusted return looks better in a chronic therapy than a one-time cure. Investors lean toward platforms that fit existing reimbursement better. Launch planning starts to look less about clinical promise and more about whether anyone can actually carry the product through the system. And then, a few years later, everyone wonders why the pipeline looks the way it does.

The Schaeffer paper lays out a stepwise set of options, starting with private-market intermediaries, then moving toward a public-private hybrid, and finally direct public financing if all else fails. That all makes sense. But the harder truth is that we have been talking around versions of these solutions for years. The challenge is not coming up with a clever financing mechanism. The challenge is getting one to stick in a system that defaults to delay, restriction, and cost shifting when something does not fit neatly.

For pharma, especially in rare disease and other high-cost spaces, financing can no longer sit off to the side as an implementation detail. It is becoming part of the product strategy itself. The evidence package matters. The durability story matters. Provider economics matter. The payer churn problem matters. The reimbursement pathway is not the cleanup step after approval. It is increasingly part of the bet.

Innovation is moving faster than the payment model. That is exciting until it is not. Because at some point, if the system cannot support these therapies in a predictable way, the market will send that message back to developers. And when it does, it will not just affect access to the next generation of cures. It will affect whether some of them get built at all.